Young people are holding back from making major life decisions until capital is unlocked for them through the inheritance of their parents’ and/or grandparents’ estate, according to a recent survey by UK wealth manager, Killik & Co.

The survey asked the views of young people aged 18-35 and their older family members aged 65 and over.

The results found that 59% of under 35s are relying on grandparents to get on the property ladder; nearly a quarter of under 35s are delaying having children until they receive it and only 7.6% of over 65s plan to pass on the majority of their estate during their lifetime.

While the survey found that three quarters (73%) of those expecting to receive an inheritance believe it is essential for their financial security, it also showed that families are often avoiding the inheritance conversation.

Just 21% of those due to inherit wealth believe a conversation about inheritance between themselves and their elder family members has taken place.

“Younger people think they will receive their inheritance sooner whilst older people don’t realise the extent to which a delay in transferring wealth impacts the lives of other family members.”

Only 40% of grandparents and parents feel that they have discussed the arrangements for their estate. This alone shows that families are not communicating well, or often at all, about inheritance, suggesting families may be unaware of the scale of the challenges faced by their younger generations. This view is supported by the fact that only 3% of the elder generation believe intergenerational wealth transfer (IWT) is an important component in the decision to start a family.

Communication breakdown

Svenja Keller, head of wealth planning at Killik & Co, says: “Our survey results show that families aren’t communicating properly when it comes to discussing how to pass on an inheritance. Younger people think they will receive their inheritance sooner whilst older people don’t realise the extent to which a delay in transferring wealth impacts the lives of other family members.

“Now more than ever, having proper conversations about intergenerational wealth transfers is vital. That’s why Killik & Co is pleased to announce a new service will be launched soon to provide the support that families need to handle this issue in a holistic way.”

In a recent article in Professional Adviser, Gillian Hepburn director of intermediary solutions at Schroders says advisers might need “to operate differently” in order to communicate with the inheritors who aren’t engaged with financial planning.

Hepburn goes on to reference 2017 research that suggests 15% of advisers had lost half of the value of their practices due to a lack of engagement in the intergenerational transfer of wealth.

“This sends out some signals in terms of the impact of engaging with other generations,” she warns.